The UAE government has ordered National Bank of Dubai and Emirates Bank International to come together. Once both these government controlled banks unite, the emirates will have the biggest banking institution in terms of assets, deposits, profit and market capitalization. In fact, 50 percent of lenders operating here are from outside the Emirates. And at present, National Bank of Abu Dhabi is the largest financer of the region. The joint venture will even overtake this and create a tough competition for local and international lenders working in the area.
After HH Sheikh Mohammed Bin Rashid al-Maktoum, the UAE prime minister and ruler of Dubai approved the merger, an official announcement of the same was made in March this year. However, it is believed that the merger will not affect both brands and the jobs will not be cut down. With assets worth 165 billion AED, it will be working jointly in the best interest of its customers, shareholders and employees. The Dubai government will have 56 percent share in the merger, which has not been named as yet. At present, the Dubai government owns 76 percent of Emirates Bank International and 14 percent of National Bank of Dubai. According to the joint steering committee of banks, Goldman Sachs, which is one of the leading investment banks in the world, will be the advisory body to the EBI-NBD merger deal. The merger seeks to enable the Emirates banks for competing in the global arena. The UAE will also be able to face the FTA and the agreements of the World Trade Organization.
All this is happening in the context of the current economic boom in the Emirates. Last year, due to the continuing rise in oil prices, the UAE economy saw a 10 percent growth. This has indirectly boosted investment in various areas, most prominently in the real estate and tourism sectors.
